What is the break-even point for state tax?
What is referred to as the cut-off point for state tax is the limit for the salary required for you as a private person to pay state income tax.
The cut-off point for state income tax is your annual salary before the mandatory basic deduction is implemented.
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When talking about the cut-off point for state tax, something called the strata limit is often mentioned. The differences between these two parts are that the cut-off point for state tax refers to your annual salary before the mandatory basic deduction is made. Thereafter, state income tax is only paid when the strata limit is reached, which corresponds to the annual salary minus the basic deduction.
The layer limit therefore applies to the taxable earned income, i.e. the income you have after the basic deduction has been deducted.
If you have an income that is below the actual strata limit, you will not be affected if the cut-off point changes. This could, for example, be about people with no or low income or those who work seasonally.
In Sweden, two cut-off points apply in 2025. One for those who have not yet reached the age of 66 at the beginning of the year and one for those who are 66 at the beginning of the year, the Tax Agency states.
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What is the state tax break for pensioners in 2025?
The break point has nothing to do with whether you chose to retire or whether you continue to work, but instead it is based on age and annual income.
The Tax Agency explains on its website that you who were not 66 when 2025 began can have a total annual income of SEK 615,300 before the state income tax begins to be collected.
However, you who had turned 66 when 2025 began can have a total annual income of SEK 697,300 before the state income tax is levied.
“The fact that you who have turned 66 at the beginning of the year have higher cut-off points is because the basic deduction is higher,” writes the authority.
For 2025, the strata limit is SEK 625,800. That is SEK 27,300 more than in 2024, when the strata limit was set at SEK 598,500, or SEK 49,875 per month.
Every year, the government determines where the layer boundary is counted according to Swedish law.
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Cut-off point for state tax in 2025 – where is the limit?
For 2025, the limit is SEK 625,800. This means that the strata limit on the taxable earned income is taxed. Everything you earn above the cut-off point you pay 20 percent in state income tax on.
“The breaking point is the limit for withdrawal of state income tax (20 percent), before basic deductions.”, writes the Swedish Tax Agency on the website.
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Sources: Tax Agency, Bokio, Wisdom